Graph walkthroughs

Trace the shock, one step at a time.

An exam does not want the final graph. It wants the chain: a shock hits, a curve shifts, price or output adjusts, and sometimes the economy corrects again on its own. Each walkthrough below plays that chain on a moving graph, one labelled step at a time, across 45 shocks on the seven diagrams that carry an economics course. Free, no account needed.

Supply and demand

One market for one good. Buyers on the demand curve, sellers on the supply curve.

Frost hits the coffee cropMicroA supply shock in the market for coffee, traced from the frost to the new price. 4 steps.Play walkthroughElectric cars and gasolineMicroA fall in demand for gasoline as drivers switch to a substitute. 3 steps.Play walkthroughIncomes rise, restaurants fill upMicroA rise in demand for a normal good after incomes increase. 3 steps.Play walkthroughCheaper chips, cheaper laptopsMicroA rise in supply after the price of a key input falls. 3 steps.Play walkthroughAvocados: a trend meets a droughtMicroA double shift: demand rises and supply falls in the same season. 4 steps.Play walkthroughRent control creates a shortageMicroA price ceiling on apartments, with no curve shifting. 3 steps.Play walkthroughA price floor for milkMicroA price floor in the milk market, with no curve shifting. 3 steps.Play walkthroughA sugar tax on sodaMicroA per-unit tax on sellers, shown as a leftward shift of supply. 4 steps.Play walkthroughA subsidy for solar panelsMicroA per-unit subsidy to sellers, shown as a rightward shift of supply. 4 steps.Play walkthroughBuy now, before prices riseMicroA rise in demand today caused by an expected price rise tomorrow. 3 steps.Play walkthrough

Labor market

Firms demand workers, households supply them. The wage is the price of labor.

A minimum wage above the marketMicroA wage floor in the market for fast-food workers, with no curve shifting. 3 steps.Play walkthroughRobots in the warehouseMicroA fall in labor demand when machines replace workers. 3 steps.Play walkthroughImmigration and the labor supplyMicroA rise in labor supply in the construction trades. 4 steps.Play walkthroughHigher output prices, more hiringMicroA rise in labor demand when the price of the product workers make goes up. 3 steps.Play walkthroughA wave of retirementsMicroA fall in labor supply when a large cohort of nurses retires. 3 steps.Play walkthrough

Then test it

Draw this diagram from a scenario.

Prompts on the labor market graph, checked from the geometry of what you drew.

Open draw-the-graph→

Aggregate demand and aggregate supply

The whole economy on one graph, with long-run aggregate supply marking potential output.

Confidence collapsesMacroA negative demand shock in the AD-AS model, from the short-run recession to the long-run self-correction. 5 steps.Play walkthroughStimulus closes a recessionary gapMacroExpansionary fiscal policy shifting AD right from inside a recession. 3 steps.Play walkthroughAn oil shock brings stagflationMacroA negative supply shock: higher prices and lower output at once. 4 steps.Play walkthroughA housing boom overheatsMacroA positive demand shock, the inflationary gap, and the long-run correction through wages. 5 steps.Play walkthroughThe central bank cools an overheating economyMacroContractionary monetary policy shifting AD left from inside an inflationary gap. 3 steps.Play walkthroughTechnology raises potential outputMacroA rise in productivity shifting both LRAS and SRAS to the right. 3 steps.Play walkthroughAn export boomMacroA rise in net exports shifting AD right, then the long-run adjustment. 4 steps.Play walkthroughExpected inflation moves supplyMacroHigher expected inflation raising wages and shifting SRAS left. 3 steps.Play walkthroughAusterity cuts demandMacroA cut in government spending shifting AD left, then the slow self-correction. 4 steps.Play walkthroughA stock market crashMacroA fall in household wealth cutting consumption and shifting AD left. 3 steps.Play walkthrough

Money market

The central bank fixes the money supply. Money demand sets the interest rate that clears it.

The Fed buys bondsMacroAn open market purchase raising the money supply and lowering the interest rate. 4 steps.Play walkthroughThe Fed sells bondsMacroAn open market sale cutting the money supply and raising the interest rate. 3 steps.Play walkthroughHoliday spending raises money demandMacroA rise in money demand with a fixed money supply. 3 steps.Play walkthroughHigher prices, more money demandedMacroA higher price level raising money demand and the interest rate. 3 steps.Play walkthroughA lower reserve requirementMacroA cut in required reserves raising the money supply and lowering the interest rate. 3 steps.Play walkthrough

Then test it

Draw this diagram from a scenario.

Prompts on the money market graph, checked from the geometry of what you drew.

Open draw-the-graph→

Loanable funds market

Savers supply funds, borrowers demand them. The real interest rate is the price of borrowing.

A deficit crowds out investmentMacroGovernment borrowing raising the real interest rate and squeezing private investment. 4 steps.Play walkthroughA saving boom lowers ratesMacroA rise in household saving lowering the real interest rate. 3 steps.Play walkthroughAn investment tax creditMacroA tax credit raising firms' demand for funds and the real interest rate. 3 steps.Play walkthroughForeign capital flows inMacroForeign saving raising the supply of funds and lowering the real interest rate. 4 steps.Play walkthroughA budget surplus lowers ratesMacroPublic saving raising the supply of funds and lowering the real interest rate. 3 steps.Play walkthrough

Then test it

Draw this diagram from a scenario.

Prompts on the loanable funds market graph, checked from the geometry of what you drew.

Open draw-the-graph→

Foreign exchange market

The market for one currency. The exchange rate is its price in another currency.

Higher US rates lift the dollarMacroA rise in US interest rates raising demand for dollars and appreciating the dollar. 4 steps.Play walkthroughAmerican tourists head to EuropeMacroSpending abroad raising the supply of dollars and depreciating the dollar. 3 steps.Play walkthroughEuropean buyers want US goodsMacroA rise in exports raising demand for dollars and appreciating the dollar. 3 steps.Play walkthroughUS inflation weakens the dollarMacroHigher relative inflation shifting both curves and depreciating the dollar. 4 steps.Play walkthroughSpeculators expect the dollar to fallMacroAn expected depreciation shifting both curves and causing itself. 3 steps.Play walkthrough

Then test it

Draw this diagram from a scenario.

Prompts on the foreign exchange market graph, checked from the geometry of what you drew.

Open draw-the-graph→

Phillips curve

Inflation against unemployment. The short-run curve slopes down, the long-run curve is vertical at the natural rate.

A demand boom along the Phillips curveMacroA demand shock as a movement along the short-run Phillips curve, with no shift. 3 steps.Play walkthroughExpectations catch upMacroHigher expected inflation shifting the short-run Phillips curve right after a boom. 4 steps.Play walkthroughAn oil shock on the Phillips curveMacroAn adverse supply shock shifting the short-run Phillips curve right. 3 steps.Play walkthroughA credible disinflationMacroLower expected inflation shifting the short-run Phillips curve left without a recession. 3 steps.Play walkthroughBetter job matching lowers the natural rateMacroA fall in the natural rate shifting both Phillips curves left. 3 steps.Play walkthrough

Then test it

Draw this diagram from a scenario.

Prompts on the phillips curve graph, checked from the geometry of what you drew.

Open draw-the-graph→

Draw the graph

Shift the right curve, leave the rest alone.

FRQ-style scenarios graded from the geometry of your drawing.

Graph practice

Unlimited graph-reading questions.

Every question is generated fresh from a live graph and graded by the same numbers that drew it.

Glossary

Every term, in plain English.

Each definition links to the lesson that teaches it and the graph where you can watch it move.

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